ZURICH, March 9 (Reuters) - Novartis's uphill struggle to re-purpose its inflammation drug Ilaris took another hit when the Swiss drugmaker said on Tuesday that the medicine failed to boost overall survival in lung cancer patients in a late-stage trial.

The drug, known generically as canakinumab and long approved to treat juvenile arthritis and rare Mediterranean fever, last year failed to help patients suffering from COVID-19 respiratory distress.

And Novartis was blocked in 2018 by the U.S. Food and Drug Administration in its bid to re-cast the medicine, which now runs around $200,000 annually in the United States and reaped some $873 million last year, as a heart disease treatment.

The latest setback comes after canakinumab, a so-called interleukin-1beta (IL-1) inhibitor, mixed with chemotherapy did not bring about a significant improvement in overall survival in previously treated patients with advanced or metastatic non-small cell lung cancer in a Phase III study.

While the results were disappointing, "these data give us valuable insights into IL-1 inhibition, said John Tsai, head of global drug development and chief medical officer at Novartis, in a statement.

Novartis shares fell 0.7% at 1225 GMT, and have fallen about 6% this year.

Tsai did say Novartis's efforts to expand canakinumab to cancer treatment continues, with two Phase III non-small cell lung cancer clinical trials ongoing in first-line treatment and for adjuvant treatment after surgery.

The drug's potential as a cancer treatment emerged as a surprise in 2017 from Novartis's long, 10,000-patient trial in cardiovascular disease, when scientists doing the studies discovered that participants getting the medicine had less risk of getting cancers that are driven in part by inflammation. (Reporting by Silke Koltrowitz and John Miller Editing by Riham Alkousaa, Louise Heavens and Steve Orlofsky)